ITV has called on BSkyB and Virgin Media to pay potentially tens of millions of pounds in annual fees to be allowed to air ITV, BBC, Channel 4 and Channel 5 in pay-TV homes.
Adam Crozier, ITV chief executive, said the public service broadcasting channels are by far the most popular on pay-TV, and that Sky and Virgin should be forced to make “retransmission” payments to carry them.
“The majority of viewing on these pay-TV platforms is PSB programming yet ITV, whether as producer or broadcaster investing in creating that content, doesn’t receive any payment,” said Crozier. “The impact of this wholly outdated regime is that UK public service broadcasters are forced to subsidise major pay-TV platforms. It is in the interests of all broadcasters that we encourage the regulator and government to look again at this issue for the benefit of the industry and viewers.”
Various figures have been bandied about over the last few years as to the potential income that PSBs might make from retransmission charges, ranging from tens of millions of pounds to as much as £200m annually.
ITV points out that last year US free-to-air broadcasters received about $3.3bn (£2bn) in retransmission payments from cable operators.
In the UK, PSBs are in the opposite position of having to pay BSkyB to have their channels carried on their platforms. Virgin Media does not charge PSBs to carry their channels.
BSkyB has cut its retransmission charges, which apply to more than 100 TV and radio channels, in recent years with PSBs expected to pay about £11m a year by the end of 2014.
Graham McWilliam, Sky’s group director of corporate affairs said: “ITV wants to keep the very significant benefits of its PSB status while cherry-picking from the fundamentally different US market. UK satellite viewers don’t pay to receive free-to-view PSB channels and Sky doesn’t pay for content that is given away for free on other platforms. If additional charges were introduced, the reality is that millions of households would end up paying for PSB channels that are supposed to be free.”
“Introducing retransmission fees would have clear benefits to the UK creative industries and the wider economy – as well as to viewers right across the UK – by enabling PSBs to continue to invest in the original programming people love to watch,” said Crozier.
David Abraham, the chief executive of Channel 4, raised the issue of retransmission fees in his MacTaggart speech at this year’s GEITF.
He said that it was “dishonest” for pay-TV companies to accuse PSBs of seeking a “subsidy” by asking for retransmission fees.
He argued that that the current legislation favours pay-TV companies and accused them of “hiding behind an intervention”.
Last year culture minister Ed Vaizey called on BSkyB to scrap its charges, or possibly face regulation.
In 2010, the then BBC director general Mark Thompson put the issue of retransmission fees in the spotlight, using his MacTaggart lecture at the Guardian Edinburgh International Television Festival to launch an attack on the double standards at Rupert Murdoch’s Fox.
Thompson noted that 21st Century Fox – Sky’s biggest shareholder, with a 39% stake – successfully gets US satellite and cable operators to pay retransmission fees for its channels, including Fox and Fox News.
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